The US-China trade war is likely to worsen in the next four to six months, said Mark Mobius, founding partner, Mobius Capital Partners, adding that the issue is more than just about trade.
“It is now not only about trade, it is about technology transfer, it is about rules and regulations that foreign or US companies have to endure when they go into China. So all these factors in addition to the military side of things where US thinks China is getting too powerful in South China Sea,” he said.
However, he believes this trade war poses many opportunities for countries like India, Vietnam, Bangladesh to diversify their export base because many of the exports from China into the US could be going from these countries.
On Fed Chairman Jerome Powell's statement, he said, "Maybe there could be another hike before the end of the year."
When asked if markets would be pricing in fewer rate hikes by Fed, he said it was likely and particularly so if oil prices stayed where they were or went lower. Oil remains the key point because inflation in the US is very dependent upon fuel, he said.
Lower crude prices will not only be good for the US but also for India, China and other markets.
Mobius said one is seeing a lot more investor interest in global markets outside US including the EMs. The emerging markets are on a level playing field with the US now, he added.